Contrarian Ideas at Fidelity Growth & Income
Manager Tim Cohen looks for opportunity in beaten-down stocks.
Editor's note: This is part of a continuing series of articles looking at the 20 biggest no-load stock funds.
In Tim Cohen’s world, bad news is often good news. “I like to look for bad news in the newspapers and on Wall Street for potential ideas,” says Cohen, who took over Fidelity Growth & Income in October 2005 after generating four years of stellar results at Fidelity Export & Multinational. One of Growth & Income’s top holdings is Home Depot (symbol HD), which Cohen thinks investors have beaten down below its true value. "A lot of people are afraid to own anything related to housing," he says. "But in my opinion, this is where some of the best values in the market are now."
Cohen is a buy-and-hold investor who favors companies that pay dividends and generate plenty of free cash flow. Beyond that, he invests wherever he finds the best opportunities. At present, that includes many blue-chip growth companies, such as eBay (EBAY) and Google (GOOG). "For every stock I look at, I think what will it will do in the next three to four years and if I can get 50% to 100% appreciation," Cohen says. Although he generally invests with the idea of holding companies "indefinitely," Cohen doesn’t always gravitate to long-term stories. "Sometimes bad companies offer exceptional upside without much risk," he says.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The fund invests 10% to 15% of assets in foreign companies. These are what Cohen describes as "best in class" companies in global industries. "It’s never a call on a specific country," he says. "Bottom-up stock-picking tends to lead me to the best stories located outside of the U.S." At last report, Growth & Income’s foreign holdings include Swiss pharmaceutical giant Roche and Irish biotechnology firm Elan.
Cohen’s bets on such stocks as Home Depot and eBay have led to sluggish results so far. Growth & Income’s 9% return over the past year trails that of the S&P 500 by five percentage points. Although Cohen is one of Fidelity’s rising stars, we’d prefer to see a longer record at Growth & Income before endorsing the fund. Current investors should HOLD it.
FUND FACTS
Fidelity Growth & Income ( FGRIX )
Assets: $30.6 billion
Manager (year started): Tim Cohen (2005)
Returns (vs. S&P 500)*
Year to date: 9.6% (14.1%)
One year: 9.4% (14.3%)
Three years annualized: 9.8% (12.7%)
Five years annualized: 3.9% (6.0%)
Ten years annualized: 7.4% (8.6%)
Expense ratio: 0.69%
Portfolio turnover: 120%
Initial minimum investment: $2,500
Phone: 800-544-8544
Web site: www.fidelity.com
*Returns through Dec. 11.
Fund Fact sources: Standard & Poor's, Morningstar
View updated data for this fund and compare the performance of the 20 biggest no-load stock funds.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
-
Want To Retire at 55? See If You Can Answer These Five Questions
Who said you can’t retire at 55? If you say yes to these questions, you may be on your way to an early retirement.
-
I'm 57 with $4.1 million and looking to retire abroad in a few years. I no longer see the point in contributing to my 401(k). Am I wrong?
We ask financial experts for advice.
-
Stocks Grind Up to New All-Time Highs: Stock Market Today
UnitedHealth stock led the Dow Jones Industrial Average amid increasing signs the labor market has not been well for months.
-
Markets Prepare for August Inflation Data: Stock Market Today
Apple CEO Tim Cook is still important, but price action this week is as much about incoming inflation data ahead of next week's Fed meeting.
-
Big Tech Names Rise Above Broad Weakness: Stock Market Today
Some familiar names enjoyed solid rallies on the resolution of outstanding questions, but macro uncertainty hangs over the broader market.
-
Alphabet Stock Pops After Google Antitrust Ruling: What to Know
GOOGL stock is soaring Wednesday after a judge ruled that Alphabet does not have to divest its Chrome browser.
-
Dow Rips 846 Points to New All-Time High: Stock Market Today
Fed Chair Jerome Powell seems ready to cut interest rates in the fall but will still rely on incoming economic data about inflation and employment.
-
Dow Retreats From a Record High: Stock Market Today
Quietly rising since April, Home Depot stock was conspicuously constructive Tuesday as high-profile tech names dragged equity indexes down.
-
Stocks Struggle Ahead of Busy Fed Week: Stock Market Today
The minutes from the July Fed meeting will be released Wednesday, while Chair Powell will deliver a key speech at Jackson Hole on Friday.
-
Dow Hits New Intraday High: Stock Market Today
Value-hunters with big stakes in a particular component kept one of the main U.S. equity indexes in positive territory.